In an uncertain world, we need to forecast more than one future.

Published:  22 October, 2014

Single point project forecasts hamper our ability to make the best choices.

The convention of single point forecasts is hampering decision makers’ ability to make the best infrastructure choices. We need to open the debate to multiple scenarios.

Many of today’s most exciting engineering projects will not be delivered for many years. Think of High Speed 2, planned to open after 2026, or new runways at Gatwick or Heathrow, which will not open until at least 2025.

These projects rely on long-term demand forecasts, predicting the need for any transport intervention and the possible impacts and pay-back of major engineering investments to inform their scale and financial viability.

However, in an uncertain world these forecasts are themselves very uncertain – not because our models are unreliable, but because the projects themselves are uncertain. Their success will depend on how the world and its inhabitants will develop over the next 10, 20 or 30 years. 

No-one knows what the future holds. Who could have predicted the length and depth of the recent economic recession, or the impact that smartphones are having on real-time travel information available to travellers? Will autonomous vehicles become part of our daily lives? When and how will that impact travel? Questions about the future abound.

It would be prudent, then, to consider a range of different possible future scenarios – yet we continue to be asked to provide single point forecasts and, if pushed, perhaps one or two sensitivity tests.

There are various drivers for this. Decision-makers find it hard to take uncertainty into consideration when determining their support – or not – for mega projects. Risk is transferred to the forecasters, who will often take a conservative stance or rely on published data from external sources.  Sometimes they are pushed into making heroic, subjective assumptions to suit the project promoter. 

It would make sense to start embracing the uncertainties in long-term project forecasts. Economic and population growth will greatly influence the need for, and value of, infrastructure investment, yet transport demand forecasting experts cannot foresee this growth with perfect accuracy. If we could evaluate the returns on transport infrastructure investment under a range of different future economic and technology scenarios, wouldn’t our politicians be able to make more robust decisions? Wouldn’t there be a stronger evidence base for debates around their local and regional impacts?

Without forecasts it is impossible to determine the need for any kind of engineering project, let alone obtain societal or political support for the work. By forecasting the performance of transport infrastructure projects under a range of scenarios, we can help identify those interventions that will stand up best to most of the conceivable futures, delivering protection and value.

The debate can then focus on the assumptions underpinning each scenario, their likelihood of occurring, resulting risks and any supporting measures and monitoring required in the meantime. 

This refocused debate is unlikely to be any less heated, but it would almost certainly be better informed.

Tom van Vuren is Divisional Director at Mott Macdonald and this piece originally appeared on their website. You can read the original here

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